Ahead of the late-April 2016 BOJ meeting, major Japanese newspapers opposed further monetary easing, influencing financial leaders. This text analyzes how that stance led to sharp yen appreciation and a market crash, repeating the same mistakes that caused Japan’s Lost Decades.

May 1, 2016
Prior to the April 27–28 meeting of the Bank of Japan’s Policy Board, the Asahi Shimbun and the Nikkei, which I subscribe to, continued to publish editorials restraining and opposing further monetary easing that the stock market was urging.
The heads of financial institutions, including the president of Mitsubishi UFJ Bank, who were raised reading the Asahi Shimbun and the Nikkei with similar editorial lines, echoed these views.
Until then, the Bank of Japan had implemented necessary policies without listening to such foolish opinions.
However, amid the violent stock market crash from the beginning of the year—triggered by growing global concerns over China’s economic collapse—the BOJ seems to have lost its conviction and, ignoring market demands, followed those foolish opinions.
In other words, it did nothing.
Yet this crash itself was highly abnormal, as I pointed out using Bloomberg data: the plunge rate in Shanghai matched that of the Tokyo Stock Exchange and stood out sharply among major global markets.
I was the first in the world to write that Chinese government-linked actors must have made enormous profits in the Tokyo market, exploiting the simple rule of yen appreciation and falling stock prices while dragging Japan into mutual destruction.
Be that as it may.
What was the result of the BOJ’s decision this time?
Calling it a catastrophe would not be an exaggeration.
In a single day, the yen appreciated by more than five yen, and stocks collapsed.
This outcome not only proved to the world that the editorial writers of the Asahi and the Nikkei, along with the financial institution leaders who still obediently read them, are beneath kindergarten level, but also demonstrated that they learned absolutely nothing from the lessons of twenty-six years ago.
I hereby state what neither Japan nor the rest of the world has noticed and condemn them severely, holding their incompetence in utter contempt.
For they are doing exactly the same thing they did at the time of the March 1990 quantitative tightening and in their subsequent behavior, which brought about Japan’s “Lost Twenty Years.”
To be continued.